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Unless established differently in the Articles of Incorporation, a quorum for a
shareholders meeting is a simple majority.
The principal's ratification of a contract can be implied from his conduct, even if the
principal says nothing to ratify.
Under the theory of negligence law, each person must act as a reasonable person of
ordinary prudence.
David, a debtor, owes debts to creditors Paul, Mark, and Gary. Paul, Mark, and Gary
agree with each other and with David to release him from his debts, in exchange for his
promise to pay Paul, Mark, and Gary 75 percent of the amount he owes each of them.
This is called a composition agreement, and such agreements generally are binding
contracts.
A party injured by fraud in a contract for the sale of goods can both rescind the contract
and sue for damages.
Bob offers to sell his bike to Sue for $100, and promises to keep his offer open for five
days. Sue thanks him and leaves. At this point, Bob still has the power to revoke his
offer.
Guy takes out a property insurance policy on his home, buying the policy from Ace
Insurance. Guy's home was damaged when a contractor, building an addition to his
neighbor's home, negligently swung a crane through Guy's dining room wall. Ace
Insurance may force Guy to seek compensation from the contractor.
Specific performance requires that the seller is obligated to give the buyer the requisite
goods covered by the contract.
Misrepresentations can either be innocent or fraudulent.
Article 2 of the UCC has no parol evidence rule.
Officers of a corporation, like a vice president, are also agents of the corporation.
A limited liability company may elect to pay no federal income tax.
Revised Article 3 of the UCC provides that the drawer of a cashier's check has the same
obligation as the issuer of a note.
If the bailee delivers the bailed property to the third-party claimant and the claimant is
not entitled to possession, the bailee is not liable to the bailor.
Potter owes George $500. Potter writes a check payable to George for that amount.
Later, George loses the check. Potter is now discharged from his liability on the check.
Property means something that can be titled or owned.
The EPA regulates underground storage tanks, such as those used for gasoline.
Directors and officers are liable to the business for losses resulting from their lack of
due care.
A state law unconstitutionally burdens interstate commerce only when it violates a
federal statute that was enacted under the Commerce Clause.
An in-depth consumer credit report is a credit report that includes information on a
person's character, reputation, personal traits, or mode of living and is based on
interviews with neighbors, friends, associates, and the like.
Patent infringement may occur even if the defendant's use did not involve a literal
reproduction of the patented item.
Under the doctrine of constructive eviction, a tenant may terminate a lease because the
condition of the property is unsuitable for the purposes for which it was leased.
Gross inadequacy of consideration is by itself a sufficient reason to set aside a contract.
Generally in business liability policies, if the insured is liable on respondeat superior
grounds, then he will be covered by the policy.
Ms. Green is a teacher at a high school. She is teaching a class on civics and
photocopies a chapter about government ethics by Mr. Blue. Ms. Green uses the
photocopy to prepare a class discussion for her students and after the class she destroys
the photocopy. Ms. Green is not guilty of a copyright violation.
Asking whether a decision will produce the right results is an example of deontological
theory.
A check payable to the order of cash is an example of bearer paper.
The principle of employment at will says that either party can terminate an employment
contract of indefinite duration.
Mr. Green signs a memorandum of understanding with Mr. Blue to by his widgets. Mr.
Green signs the last page of the memorandum by writing his initials in cursive. A court
will enforce the agreement between Mr. Green and Mr. Blue.
The basic priority rule for competing security interests is that the first secured party to
attach wins.
A bank may, but need not, pay any checks that are more than six months old.
Federal restrictions that forbid beer producers from listing the alcohol content of their
beer on product labels are unconstitutional.
The transfer of a right under a contract is called assignment.
The traditional rule is that, when the consideration given by the adult party under a
minor's contract has been lost, stolen, or dissipated, the minor can disaffirm without
compensating the adult for the loss in any way.
Under the Revised Article 3 of the UCC, the variable interest rate notes are not
negotiable.
If a customer does not discover a forged check and report it to the bank within one year
from the time of the statement containing the check, the bank is not obligated to recredit
his account for the amount of the forged check.
An offering circular is a disclosure document required under Regulation A of the SEC
for a(n) _____ offering exemption from the registration provisions of the 1933 Act.
A. intrastate
B. interstate
C. private
D. small
In the case of _____, the right must be expressly conferred on the mortgagee by the
terms of the mortgage.
A. foreclosure by action and sale
B. strict foreclosure
C. accommodative foreclosure
D. foreclosure by power of sale
Mark and Bonnie are partners. Mark contributed $30,000 of capital to the partnership
and Bonnie contributed $15,000. Mark does 70 percent of the partnership's work, while
Bonnie does 30 percent. They agree that Mark will assume 60 percent of partnership
losses and Bonnie 40 percent. They have not decided how to share profits. The
partnership earns a profit of $90,000. What is Bonnie's share of the profits?
A. $45,000
B. $30,000
C. $27,000
D. $36,000
When courts review formal agency adjudications or formal rulemaking, the APA calls
for the application of a(n):
A. substantial evidence test.
B. beyond reasonable doubt review.
C. de novo review.
D. arbitrary and capricious test.
The defendant's intentional exercise of dominion or control over the plaintiff's personal
property without the plaintiff's consent is called:
A. defamation.
B. conversion.
C. interference.
D. libel.
Mr. Green is a local mobster who makes Mr. Blue pay $100 not to have his business
burned to the ground. What is the status of the contract between Mr. Green and Mr.
Blue?
A. There is no contract because Mr. Green gave inadequate consideration
B. There is a contract as long as Mr. Green registers the contract with the Secretary of
State
C. There is a contract as long as $100 is a reasonable profit for not burning down the
business
D. There is a contract as long as a court reviews the terms within 30 days
A nolo plea or a consent decree is often attractive to antitrust defendants because:
A. the government must prove criminal intent on the defendant's part.
B. it results in an imposition of a penalty without requiring a defendant to remedy his
actions.
C. it is not admissible as proof of a violation of the Sherman Act in a private plaintiff's
later civil suit.
D. it does not attract the same penalty as a guilty plea or a conviction at trial.
Store owners' "conditional privilege" defense against intentional tort claims brought by
detained shoplifting suspects, recognized by most states, usually:
A. requires that the store owner act with police consent.
B. requires that the store owner act with written consent of suspects.
C. requires that the store owner act on evidence against suspect.
D. requires that the store owner act with reasonable cause.
Which of the following is false about the power of courts?
A. Courts are not absolutely bound to favor one technique of statutory interpretation
over another.
B. Courts can distinguish prior decisions in common law cases.
C. State Supreme Courts can overrule their own prior decisions.
D. Courts can make or interpret law in the absence of a case.
Maya Efrat, Chief Financial Officer for BAZ Inc., is authorized to sign checks for BAZ
Inc. She signs a check "BAZ Inc. by Efrat, Chief Financial Officer." Which of the
following statements is most accurate?
A. Maya and not BAZ Inc. is liable on the check.
B. BAZ Inc. and not Maya is liable on the check.
C. Both BAZ Inc. and Maya are liable on the check.
D. Neither BAZ Inc. nor Maya are liable on the check.
Which state passed the first limited liability company (LLC) statute in 1977?
A. Wyoming
B. Nevada
C. Montana
D. Nebraska
Infractions:
A. involve significant moral culpability on the offender's part.
B. are not punishable by fines.
C. are a serious crime.
D. are not punishable by confinement in jail.
Which of the following tests requires a professional to know the name of the nonclient
who will use his/her work product and the particular purpose for which that person will
use the work product?
A. Restatement test
B. Primary benefit test
C. Foreseeable users test
D. Scienter test
Beth has just turned 17 years of age. She entered into a contract with ABC Corp. for the
purchase of a used car, with full payment due in 30 days. The purchase price was
$5,000. This car is necessary for Beth to use as transportation to her job, which she
needs in order to pay tuition at the university where she is a freshman. Beth's parents
have refused to help her pay for college. Three days later Beth changes her mind; she
now wants to return the car because she has learned that it is worth only $4,000. $4,000
is in fact the reasonable value of this car. If Beth does not pay, and the seller sues, the
outcome of this lawsuit will be that:
A. Beth must pay $5,000.
B. Beth must pay $4,000.
C. Beth does not have to pay for the car; she is entitled to the remedy of rescission
because she is a minor.
D. Beth does not have to pay for the car; she is entitled to the remedy of punitive
damages because ABC overcharged her.
Which of the following is a way of perfecting a security interest?
A. Mere attachment of security interest
B. Filing a private notice
C. Creditor making a private sale of the collateral
D. Debtor retaining the possession of the collateral
You are standing on a street corner. A truck belonging to the Safety First Trucking Co.
(SFTC) carrying radioactive nuclear waste has a tire blown out, which causes the truck
to overturn near you. Radioactive waste escapes from the truck and covers half your
body. As a result, you suffer serious medical harm. What legal theory of recovery that is
available to you will not require you to prove that SFTC was at fault?
A. Negligence
B. Express warranty
C. Implied warranty
D. Strict liability
Attendees of free public lectures and church services would be called:
A. trespassers
B. licensees
C. invitees
D. business visitors
In an assignment/delegation, which party remains secondarily liable on the obligation
that has been delegated?
A. Assignor/delegator
B. Assignee/delegatee
C. Third party
D. Obligee
When a promoter is liable on a preincorporation contract, the promoter is released from
liability on the contract:
A. only after the contract has been fully performed.
B. when the corporation ratifies the contract.
C. when the corporation and the other party to the contract agree to release the promoter
from liability.
D. when the corporation's articles have been filed by the secretary of state.
Which of the following was an unintentional effect of the 1970 Clean Air Act?
A. Decrease in the output of electricity generated
B. Development of clean-fueled vehicles
C. Sudden increase in the prices of clean fuels
D. Long range transport of some pollutants
Which of the following is true of the drawer-drawee relationship?
A. The drawer becomes the creditor when the drawee bank pays more than the drawer
has on deposit.
B. The drawer becomes a debtor and the drawee bank the creditor at the time of
opening a checking account.
C. The drawer becomes the insured and the drawee bank the insurer at the time of
opening a checking account.
D. The drawer becomes the creditor and the drawee bank the debtor at the time of
opening an account.
Settlements in liability cases occur only when:
A. the insurer issues a declaratory judgment.
B. the third party gives up the legal right to litigate.
C. the third party demands prelitigation payment.
D. the third party institutes litigation.
The following statements pertain to alleged violations of Section 1 of the Sherman Act.
Which statement is accurate?
A. Although tying agreements are classified as per se violations of Section 1, the
judicial treatment given to them differs from pure per se treatment.
B. Because vertical restraints on distribution necessarily harm intrabrand competition,
they are considered per se violations of Section 1.
C. Because group boycotts amount to reprehensible conduct that cannot have
competitive justification, all such agreements are considered per se violations of
Section 1.
D. Although concerted action ordinarily has been required in order for there to have
been a violation of Section 1, the Supreme Court recently dispensed with the
requirement in price-fixing cases.
What is an injunction?
A. The awarding of compensatory damages
B. A court's order requiring a person to do something
C. The cancelation of a contract regarding real estate
D. A lawsuit for damages brought by the nonbreaching party
FIFRA regulates what environmental area?
A. Agricultural chemicals
B. Clean drinking water
C. Fishing waters
D. City air quality
Which of the following can provide relief to landlords from cases of negligence
liability?
A. Assignment
B. Tort liability
C. An Exculpatory clause in a lease
D. Constructive eviction
The Electronic Funds Transfer Act governs "check conversion" transactions.
Dillon's, a discount retailer with over 500 employees, includes a clause in its
employment application stating that all future employment disputes will be resolved
through binding arbitration. This clause most likely:
A. will be considered valid by federal courts.
B. will be considered unenforceable by all courts.
C. will result in employees having to mediate their employment-related claims against
Dillon's.
D. will require an employee to mediate employment-related disputes.
Big Corp. (BC) is in the business of making and selling plastic products. Dominant and
Micro both buy plastic products of similar grade and quality regularly from BC.
Dominant is the biggest customer of BC while Micro usually buys very small
quantities. Due to an unexpected shortfall of raw materials, BC anticipates significant
reduction in plastic production at its plants. In order to maintain supply of plastic
products to Dominant, BC quotes a 40 percent higher price for its products to Micro.
Will this amount to a violation of Section 2(a) of the Robinson-Patman Act?
A. Yes, because BC is committing primary level price discrimination.
B. No, because Dominant deserves the preferential treatment.
C. Yes, because BC is adversely affecting competition at its customer's level.
D. No, because BC has not made any sales at higher prices to Micro.
Amy is hired by BigMart as a cashier. At the time of hiring, Amy is required to sign an
arbitration agreement under which she agreed to settle any and all claims she might
have relating to her employment by final and binding arbitration before a neutral
arbitrator and in accordance with BigMart's "Dispute Resolution Rules and Procedures"
which is a separate ten-page document containing complex procedural details. Under
the agreement, Amy is required to pay for all arbitration-related costs, and BigMart can
still sue Amy in civil court for claims arising from her employment. A court will most
likely view this agreement as:
A. unenforceable since it is a quasi-contract.
B. enforceable because it is an arbitration agreement.
C. unconscionable because it is an adhesion contract that is oppressive.
D. enforceable because it is part of a valid employment agreement.
The ULPA and the RULLCA permit limited partnerships and LLCs to merge with other
businesses. For the merger procedure, the first requirement is that the companies have
to:
A. file a suit in the proper court.
B. obtain consent from the state secretary.
C. adopt a conversion plan.
D. enter into an agreement.
Earl is Hall's agent for a real estate transaction. Which of the following will terminate
the agency relationship by act of the parties?
A. Earl revokes his agency.
B. Hall announces that he is filing for bankruptcy.
C. Hall dies, but Earl is not informed.
D. Notice of the death of Hall placed in a newspaper.
N-Gate Corporation (NGC) was defectively organized. As a result, not even a
corporation by estoppel was formed. An NGC truck driver negligently ran over a
pedestrian while delivering goods manufactured by NGC. The pedestrian now wants to
sue. Who is liable in this situation?
A. The managers of NGC only.
B. The truck driver only.
C. The truck driver and the managers of NGC.
D. The truck driver, the managers of NGC, and all the purported shareholders of NGC.
Which of the following indorsements is a blank indorsement?
A. "For Deposit Only"
B. "Mel Gibbs"
C. "Pay to Jack Black in Trust for Mel Gibbs"
D. "Pay to the Order of Jack Black, Mel Gibbs"
Which of the following terminates the insurer's duty to perform under the policy?
A. The insured's breach of warranty
B. An increase in the value of the insured property
C. A decrease in the value of the insured property
D. A case of innocent misrepresentation by the insured
Bob is a partner in XYZ Limited Partnership. For tax reasons, Bob wishes to be both a
general and a limited partner. May he do this?
Barry and Andrew contract for the sale of 100 widgets (goods) from Barry to Andrew
for $1,000. The contract contains a clause prohibiting assignment of "the contract."
Nonetheless, Andrew assigns "the contract" to Smith. Is there a valid assignment of
contract rights here? Is there a delegation of duties?
Carol, a senior manager in Bizlaw Inc., encourages Rob, her junior manager, to bill
Bizlaw's clients for his commute time, and identify it as "meet and confer with senior
manager." Carol explains that she will then adjust her own billing sheet to match this
entry. Carol tells Rob that all other Bizlaw junior and senior managers engage in this
practice, and that clients have never questioned such entries. Rob is not sure whether
this would be an ethical action. What should Rob do?
Jody, a consumer, ordered a computer from Dwindex Technologies. After Jody validly
rejected the computer due to its nonconformity to the contract, Dwindex insisted that
Jody return it. Jody refused, and instead just held the computer for Dwindex to retrieve
it. Is Jodie obligated to return the computer?
Why are noncompetition agreements disfavored by the law?
The constitutional right of privacy includes various rights that the Supreme Court has
recognized as fundamental for citizens and families.
What are the three options available to a secured creditor regarding the collateral if the
debtor defaults?
Adams takes insurance from Prince insurance company for his office building. There is
an increase of hazards clause in the contract. However, after some days Adams was
forced to keep highly explosive material in the office building for official purpose.
However, the building got damaged from inside due to an explosion caused by the
hazardous substance. Adams now wishes to claim insurance coverage. Prince is
refusing to give insurance. Will Adams succeed in getting his insurance claim?
Paul contracts to sell his home to Dee for $100,000. The sale, which was negotiated by
a broker for two parties who never met, was set to close on September 1. On July 15,
Paul discovers the identity of the buyer, and immediately writes Dee to tell him that
there's no way he'll ever sell his house to "some hippy." Must Dee wait until September
1 to sue Paul for breach of contract?
Nick, a real estate agent, decided to purchase a house for $300,000 after hiring
architects, decorators, and electricians to examine it. However, Nick did not get the
property appraised. After executing the sale contract with the homeowner, Kurt, Nick
discovered that the house was actually worth only $150,000. Will Nick be entitled to
rescind his contract with Kurt? Explain.
In a partnership, are partners liable for the crimes committed by another partner?
Explain.
What is the UCC approach to the risk of loss of goods during transportation?
Greg sues Ned in an effort to get title to some land claimed by Ned and located inside
the state of Texas. Ned has never been to Texas in his life, has never had any contacts of
any kind with the state, and refuses to appear in Texas to defend against Greg's suit.
Later, after Greg wins a default judgment against Ned, Ned shows up in Texas to claim
that the judgment was invalid because he was totally outside Texas, hence Texas courts
had no jurisdiction over him, and for this reason they could not affect his rights to the
land. Is Ned right? Why or why not?
Ben, an accountant in Los Angeles, interviewed with Matt, a CPA in San Francisco. At
the end of his interview, Matt, the personnel manager, told Ben: "I look forward to
working with you. Please let me know if I can help you prepare for your move to San
Francisco." Ben returned to Los Angeles, quit his job, gave a 30-day notice to his
landlord, rented an apartment in San Francisco, and moved to San Francisco. Ben then
called Matt to ask if he could start his job the following week. Matt replied that Ben had
no job with him. Ben wants to recover the cost of moving expenses from Matt. Under
what legal theory may he proceed? Discuss the arguments that Ben and Matt will each
make if the claim is brought.
List a few scenarios under which sellers may be excused from performing contractual
obligations.
Ned and Bill complete an oral contract for the sale of land from Ned to Bill for
$100,000. Bill pays Ned the $100,000, and then begins to build his house on the land.
At this point, Ned says that the deal is off and refuses to convey the deed to Bill. In
doing so, Ned relies on the statute of frauds. Is this agreement enforceable by Bill?
Damages associated with the real harm that a plaintiff in a contract case suffered is
referred to as punitive damages.
Bari deeds Blackacre to Adam, Charlie, and David as joint tenants with right of
survivorship. Adam then sells his interest in Blackacre to Sally. Soon after, Charlie dies.
Who now owns Blackacre? In what form(s)? Discuss.
